​Apple puts $1b into Chinese ride-booking company Didi Chuxing

Apple CEO Tim Cook says the $1 billion investment into China's Didi Chuxing is aimed at better understanding the world's second-largest market.
Written by Cho Mu-Hyun, Contributing Writer

Apple has invested $1 billion in China's cab-hailing service Didi Chuxing, the company has announced -- a move that CEO Tim Cook has said would help the firm better understand the local market there.

"We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market," Cook told Reuters. "Of course, we believe it will deliver a strong return for our invested capital over time as well."

Apple, which has reportedly hired automotive experts to develop its own driverless cars, will possibly collaborate more with Didi Chuxing in the future, Cook also said.

Didi Chuxing, formerly known as Didi Kuaidi, said Apple's investment was the single largest it has ever received. The company dominates the ridesharing market in China.

The company said it completes more than 11 million rides a day and controls 87 percent of the market.

The news comes amid pressure from Chinese regulators who shut down Apple's online book and film services last month.

Apple is having a hard time at China, to put it mildly. Other setbacks include losing exclusive rights to the 'iPhone' name there, while the most damaging of all is the steep drop in revenue from its phones there from last year.

Although a critical and luring market to smartphone vendors such as Apple and Samsung, the country's local firms are quickly rising in popularity over foreign firms.

For example, both Apple and Samsung launched their namesake mobile payments there but are having difficulty competing with local counterpart Alipay, sources within the firms told ZDNet.

Samsung mobile boss DJ Koh said the firm will "return to form" in its mobile business there and recently met with local telco executives to strengthen ties. He is not the only one making overtures to China. Cook has previously made a high-profit visit there as well and is reportedly planning to travel back to the country this month; while Facebook founder Mark Zuckerberg visited the country earlier this year.

Instead of launching a direct service, investment on a local vendor may be a smart move on Apple's part.

East Asian countries such as China, Korea, and Japan prefer heavily localized services over foreign counterparts. In South Korea, Kakao Taxi has beaten Uber in being the most popular cab-hailing service.

While in Japan, local handset manufacturers maintain their iron grip within their own market despite difficulty from abroad and always rank within the top five.

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